1. Relief for Infosys CEO Vishal Sikka, Mohandas Pai says co-founders not looking to make comeback

Relief for Infosys CEO Vishal Sikka, Mohandas Pai says co-founders not looking to make comeback

Says issues raised regarding corporate governance concern every shareholder

Bengaluru | Published: February 20, 2017 6:17 AM
sikka-l-pti Infosys is also reportedly holding discussions with some of the investment bankers to discuss its future capital allocation strategy and this could also possibly mean a share buyback issue. (PTI)

P P Thimmaya

The founders of Infosys are unlikely to make a comeback in the light of recent issues on corporate governance and capital allocation at the software firm, T V Mohandas Pai, former Infosys board member and chairman of Aarin Capital Partners, told FE. “Nobody wants to come back. The issues raised concern every shareholder,” Pai said.
Infosys founder N R Narayana Murthy has publicly raised issues regarding the corporate governance standards at the company following which chairman R Seshasayee defended the board’s actions pointing out that given the processes in place, there had been an element of subjectivity. Pai believes some views of shareholders are being ignored by the board.

On a recent investor call, R Seshasayee said, “We have been engaging with the promoters and the founders. We have been receiving their inputs.” Pai, who was CFO at Infosys, said that the focus of the board should be on shareholder value creation. He feels that in the current circumstances the company does require large amounts of cash.

Infosys is also reportedly holding discussions with some of the investment bankers to discuss its future capital allocation strategy and this could also possibly mean a share buyback issue. Pai was more forthright in views regarding Infosys’ capital allocation strategy. “Infosys has to learn from TCS in meeting shareholders’ expectation.”
TCS has already announced its plans to go for a buyback issue and details will be unveiled on February 20.

Over the last 10 days or so, there have been calls by a few investors asking for restructuring of the Infosys Board. Another Infosys board member, V Balakrishnan, was very categorical that R Seshasayee should step down and the board should engage with the founders. However, the board has expressed its confidence with the chairman.
“Investors will have to put pressure on the Board and there should be certain amount of restructuring,” Pai said.

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